"Both" can only be used with two, and the reader typically needs previous knowledge that there are two of them, or the sentence will sound strange. For example, "There were two sisters, and both went away to college."
With "each", knowing a precise count is optional.
Perhaps these are the reasons why, to my ears at least, "each" implies there are more than two -- if the preceding text gives a count of two, I would expect the writer to use "both", a word that exists just for such a situation.
However, on the other point raised, I think "both" does slightly connote that they did go to the same school -- common phrases that use the word tend to have a tighter coupling of the subjects. For example we "look" and "see" with both eyes, not with each eye. Or the old joke "They both got married -- to someone else." I'd argue this is a pretty mild effect, though.
As a side note, it's interesting that (if you omit "of the") the plurality changes: "Each sister is wearing blue;" "Both sisters are wearing blue."
That said, I agree with Janus, each is perfectly correct ;-)